USPlabs, which sold the best-selling workout supplement Jack3d, and six of its executives face criminal charges for the unlawful sale of nutritional supplements, the U.S. Justice Department said Tuesday in announcing a larger probe by federal agencies aimed at stemming the sale of unproven products.

This action by the DOJ raises the stakes to a new level – criminal charges. While the FDA and FTC do the best they can, they often lack teeth when it comes to supplements. The FDA might issue a polite request and then escalate to a stern warning when companies step out of line. The FTC can issue fines which amount to little more than a slap on the wrist – the cost of doing business. Both agencies are playing whack-a-mole and losing.

As an aside, homeopathy is different because legally it is regulated as a drug, meaning the FDA has much more regulatory power and could effectively shut down the industry if they wanted. All they have to do is require evidence of efficacy for any homeopathic product and the entire industry would evaporate.

The predictable result was that the supplement industry exploded. We now no longer need to speculate about what an ineffectively regulated health care product industry would look like – we have almost 20 years of the supplement industry as an example.

The idea of DSHEA is that market forces and consumer choice will lead to better products, with the FDA and FTC looking over industry’s shoulder and helping them self-regulate. That’s not what happened.

What did happen was that the supplements industry realized it could put almost anything in a bottle (as long as it didn’t contain an actual drug), and make whatever claims they wanted for it. They didn’t have to do any research or provide any evidence, just put a small disclaimer at the bottom saying the FDA has not reviewed the claims, a disclaimer the public was certain to ignore.

Even though the lax regulations created a formula for essentially making millions off of the placebo effect, the supplement industry pushed the limits even further. It has recently come to light that many supplements on the market don’t contain what’s on the label, and contain undisclosed fillers, substitutions, and contaminants.

Sometimes they even contain banned drugs – put a little Viagra in your male enhancement supplement, or a stimulant in your weight loss supplement, to get an edge on the competition. The FDA issues warning letters to companies who do this, but most fail to comply.

All of this is justified by those making millions off supplements, and those in the public who have been receptive to their advertising, by the assumption that supplements are “natural” and therefore magically safe and effective. This is not true. Herbs are drugs and can have drug side effects, toxicity, and interactions. This is why the FDA is now targeting regulation of the term “natural.”

Now the DOJ is involved

While the FDA and FTC struggle to contain this avalanche of what are essentially fake products defrauding the public, without really having the teeth or resources to do so effectively, now they are getting some help from the justice sector.

At the state level, earlier this year New York State attorney general’s office, after an investigation, filed a cease-and-desist order against GNC, Target, Walgreens, and Wal-Mart, ordering them to stop selling a number of herbal supplements that were found not to contain the ingredients on the label, and some of which contained unlisted fillers that were potential allergens.

Now at the federal level, the DOJ is getting involved, and with good reason. Here is perhaps the worst offense alleged in the indictment:

The indictment also said there were a rash of liver injuries associated with the product OxyElite Pro Advanced Formula in late 2013, and several users needed liver transplants.

USPlabs, when told of this, informed the U.S. Food and Drug Administration that it would stop marketing the supplement but instead tried to sell off inventories as quickly as possible even as executives ordered that two offending substances be removed from the formula, the indictment said.

Let that sink in – the executives were apparently told that their product was causing liver failure, so they sold off their inventory as fast as they could.

Conclusion: What will happen to the supplements industry?

We can think of the regulation and behavior of the supplement industry on three levels. The first level is where the supplement industry fully complies with current regulations. Even then, the industry is allowed to essentially sell unregulated drugs (herbs) with “structure function” health claims, testimonials, and endorsements without any burden of proof to back up their claims.

We now have a two-decade experiment on this regulation, and it is the utter failure that its critics said it would be. The net result was the public wasting billions of dollars a year on worthless supplements – and this is the best case scenario.

Level two is where the industry violates even these lax regulations, with poor quality control, inaccurate labeling, adulteration with regulated drugs, contamination, and making prohibited claims.

Now we are seeing level three – criminal corporate malfeasance. No one should be surprised that when lax regulations allow an industry to be dishonest, it attracts dishonest people.

What we need now is a complete overhaul of how the supplement industry is regulated. DSHEA should be repealed, or at least updated to fix its myriad problems (effectively repealed).

I have nothing against the free market, it can be a powerful tool to drive innovation and quality. In our current economic system companies can invest in research and product development, and then make a huge profit off of that development.

But the free market is a construct of regulations – there have to be rules or else you don’t have a free market, you have chaos. Especially with a vital industry like health care, thoughtful regulations are necessary to allow innovation while protecting the public health.

There is also a unique challenge for health care products in the free market – it is very difficult for consumers to evaluate long term effects of products and services. All product effects are obscured by placebo effects. Consumers cannot reasonably rely on their own anecdotal experience – they need to be informed by scientific evidence. That evidence will not be created and evaluated unless regulations demand it. Private consumer information companies also don’t have the resources to do this.

What we need is a system in which drugs are regulated as drugs, not food or vitamins. All health claims should be backed by adequate evidence. The industry needs to be carefully regulated for quality control, transparency, and accuracy in labeling.

Ironically, the public thinks this is what they already have. Most people have no idea that they are at the mercy of the supplement industry’s self-regulation.

Perhaps, however, we are reaching a tipping point where the political will exists to make some effective changes. Let’s hope so.

Posted by Steven Novella

Founder and currently Executive Editor of Sivasucakbileti Steven Novella, MD is an academic clinical neurologist at the Yale University School of Medicine. He is also the host and producer of the popular weekly science podcast, The Skeptics’ Guide to the Universe, and the author of the NeuroLogicaBlog, a daily blog that covers news and issues in neuroscience, but also general science, scientific skepticism, philosophy of science, critical thinking, and the intersection of science with the media and society. Dr. Novella also has produced two courses with The Great Courses, and published a book on critical thinking - also called The Skeptics Guide to the Universe.